Shares of Go Fashion (India) shed 5 percent on Monday on reports that US venture capital firm Sequoia Capital is planning to sell a 10 percent stake in the firm worth ₹625 crore via block deals today.
The floor price for the stake sale has been decided at ₹1,135 per share, almost 5 percent lower than ₹11,93.95, its closing price on Friday (June 9, 2023) and JM Financial is the broker for the same.
The stock fell as much as 5 percent to its day's low of ₹1,133.30. The stock is now 22 percent away from its 52-week high of ₹1,450, hit in November 1, 2022. Meanwhile, it has risen over 25 percent from its 52-week low of ₹874.70.
In the last one year, the stock has gained around 19 percent, however, it is down over 4 percent in 2023 YTD.
While the stock has advanced over 6 percent in June so far, extending gains for the fourth straight month since March, up 25 percent since then. It fell 11.6 percent and 13.3 percent in Feb and Jan, respectively.
The move comes after the venture capital firm announced that it is splitting its businesses in China as well as India and Southeast Asia into two independent firms, which will be run without any involvement of Sequoia going forward.
The China firm will be named Hongshan in English, while in India and Southeast Asia, Peak XV will manage more than 400 portfolio companies and assets of $9.2 billion, which Sequoia previously managed, it further informed.
As of September 2022 quarter, Sequoia Capital held a 13.8 percent stake in Go Fashion, however, in the December 2022 quarter, the venture capitalist sold around 3.7 percent stake in the fashion firm for ₹228 crore. Post the sale, Sequoia held a 10.18 percent stake or 55 lakh shares in the firm. After the current stake sale of 10 percent, Sequoia Capital's holding in the firm will be reduced to almost nil.
Sequoia is the largest venture capital firm in India with a portfolio of $9 billion in its assets under management. It has also invested in major startup names like Zomato, OYO, etc.
In the March quarter, Go Fashion posted a 20 percent rise in net profit to ₹15 crore as against ₹12 crore in the year-ago period. Meanwhile, its total revenue for the quarter under review also advanced 34 percent to ₹160 crore versus ₹119 crore reported in the same period last year.